ACC 250 · Introduction to Financial Accounting
Four questions on revenues and expenses,
then one two-year problem worked end to end.
Fall 2026
Revenues · 1 of 2
A bakery is closing its books for April. Which one is April revenue?
B. Revenue follows delivery, not cash. The cakes went out in April, so April earned the $3,000. A, C and D bring in cash without a sale.
Revenues · 2 of 2
In June a shop delivered $8,000 of goods, received $1,500 in advance for a July order, and collected $900 for goods it had delivered in May. How much is June revenue?
A. Only the June delivery is earned in June. The $1,500 has not been delivered yet, and the $900 was earned in May.
Expenses · 1 of 2
Which one is an expense of this month?
B. Wages are a cost of operating the business, used up this month. Dividends are a distribution of profits, not a cost of doing business.
Expenses · 2 of 2
A company reports revenues of $50,000 and expenses of $32,000, and pays $5,000 of dividends. Which statement is correct?
B. Dividends never enter the income statement: 50,000 − 32,000 = $18,000. They reduce retained earnings one line below it: 18,000 − 5,000 = $13,000.
Q5 · Fill in the blanks for Blue Cart Co.
| Year 1 | Year 2 | |
|---|---|---|
| Revenues | $9,000 | $14,000 |
| Expenses | 5,000 | 8,500 |
| Net Income | $4,000 | $5,500 |
| Year 1 | Year 2 | |
|---|---|---|
| Beginning RE | $0 | $3,000 |
| Add: Net Income | 4,000 | 5,500 |
| Less: Dividends | (1,000) | (2,000) |
| Ending RE | $3,000 | $6,500 |
Watch the two that never appear.
The owner's $2,000 of stock is cash without a sale.
The $1,200 received in advance is Year 1 cash but Year 2 revenue —
it is earned only when the service is delivered.
Revenues are earned when goods or services are delivered. Expenses are costs of operating the business used up in the period. Ending RE = Beginning RE + Net Income − Dividends.